Being a real trader does not mean that you just need to know the basics and rules of trading, understand the processes taking place in the market. It is also necessary to understand the psychology of exchange players, to have good trading tools at your disposal. It is difficult to become a real pro on one luck.
In this article, we will touch upon only one of the above aspects – we will talk about the next trading instrument. We will get acquainted with a new indicator strategy called “Big E”. It was found by me on one of the English-speaking forums and translated especially for you. The discussion of the strategy itself amounted to almost 600 messages on the forum.
Trading tools TS “Big E”
The system uses only four tools. I think that each of them individually is well known to you. All of them are present in the standard MT4 toolbox, except for one, and are installed on the chart in the usual way – via the Navigator or the Insert menu located on the MT4 Toolbar. In our case, we will use the Navigator and sequentially set them all on the chart. You can download the missing indicator along with the strategy template from the link at the end of the article.
- Heiken Ashi candlestick indicator
Go to the terminal, open the Navigator window, find the Heiken Ashi tool and drag it onto the chart with the mouse. You don’t need to change anything in its settings, we leave all its settings by default. This is how this tool will look on our chart:
- TDI indicator (8, 3, 3)
Take out the “TDI” tool through the “Navigator” window; it will be located in its “basement” window. You can see how it looks on the graph in the figure below:
- Stochastic indicator
And this time, using the Navigator, we pull out the Stochastic indicator we need. We also leave all the parameters of its settings by default, but you can change the color rendering of its curves at your discretion:
- EMA 5
We use the same “Navigator”, but this time we are looking for the “Moving Average” tool and pull it out on the chart. The moving average curve will be placed in the price chart window. In the window that opens its settings, you need to change some parameters. You can also customize the display style of this tool’s curve:
You and I have just sequentially installed all the indicators required to trade the Big E strategy. Before studying signals from all these instruments, I will say that we will work according to the rules of this strategy:
- With the EUR / USD currency pair;
- On the H1 timeframe.
Next, we will look at the signals and trading rules for this strategy.
For a trader to open a Sell position, the following conditions must be met on the chart:
- The green curve of the “TDI” indicator from top to bottom crosses its red curve.
- Curves of the Stochastic indicator should be directed in the same direction as the TDI curves – in this case, the curves of both instruments are directed downward.
- The red Heiken Ashi candlestick closes below the moving average. This is a signal to open a sell position – when it closes, we enter the market.
All the necessary signals have been received from the indicators, and they all lie almost on the same vertical line – this is a good sign for opening a sell position.
Signals for a buy trade
When opening a Buy position, a trader must make sure that the following conditions are met on the chart:
1) The green curve of the “TDI” instrument crosses its red curve from bottom to top.
2) Curves of the Stochastic instrument are directed upwards, just like the curves of the TDI indicator.
3) Closing of the blue Heiken Ashi candlestick occurs above the moving average. This is a signal to open a buy position – we enter the market at the beginning of the formation of the next candle.
All received buy signals lie on the same vertical. This is a powerful signal for the trader to enter the market with a buy at the formation of a new Heiken Ashi candle.
Profit taking according to the rules of “Big E”
There are no clear or specific rules for closing deals in trading using this strategy. I did not find any clear recommendations in the discussion thread of this strategy, so I offer you my options for taking profit:
- Stop Loss and Take Profit. I set Stop Loss beyond the local minimum / maximum. Take Profit, I think, can be set at 20-25 points, not forgetting about the possibility of closing at breakeven.
- I also recommend closing the deal after receiving an opposite signal from the TDI indicator or when its curves fall into the oversold or overbought zone. However, even in this case, you should take into account some of the nuances of price behavior and indicators.
Opened a buy deal with the EUR / USD pair on TF H1. The entry was made in accordance with all the rules of the Big E strategy, and we will now consider the exit from the deal in more detail:
Entry price = 1.1455
Close price on pullbacks:
- 1st rollback = 1.1510; profit is (1.1510 – 1.1455) = 55 p.
- 2nd rollback = 1.1535; profit is (1.1535 – 1.1455) = 80 p.
- 3rd pullback = 1.1562; profit is (1.1562 – 1.1455) = 107 p.
- 4th pullback = 1.1573; profit is (1.1573 – 1.1455) = 118 p.
- 5th pullback = 1.1603; profit is (1.1603 – 1.1455) = 148 p.
Closing this trade at one of the Stop Loss would have yielded less profit. On average, by 10-20 points at each pullback, provided that the transaction is transferred to the breakeven in a timely manner. In this case, we did not use Take Profits, but accompanied the deal, since we were interested in the greatest profit.
So we have completed the review of the Big E strategy, if you liked this strategy, write us about it in the comments.